The "Big Thirst"- for Oil
by Lloyd Alter, Toronto on 04.20.08
From a great graphic by Bill Marsh of the New York Times
The New York Times writes about the factors causing the rise in the price of oil, which hit $ 116 per barrel this week. Jad Mouawad hits all the usual suspects, such as the weak dollar, worries about terrorism (?) and demand, saying "Producers are struggling to pump as much as they can to quench the thirst not only of the developed world, but fast-growing developing nations like China and India, the two most populous countries." However he then goes on to say "The number of cars and trucks is projected to double in 30 years— to more than two billion — as developing nations rapidly modernize. And twice as many passenger jetliners, more than 36,000, will in all likelihood be crisscrossing the skies in 20 years."
And how much fuel is there to power all this? "A small band of skeptics view today’s record prices as evidence that oil supplies have peaked — that half the globe’s oil supply has already been used up. But most experts believe that there are still enough oil reserves, both discovered and undiscovered, to last at least through the middle of the century."
At which point I began to wonder what planet is this guy writing about. On this planet, the consensus is that we have to dial back our fossil fuel use dramatically and cannot possibly survive twice as many cars and planes. On this planet, more than a "small band of skeptics" thinks that we are running out of affordable oil long before the middle of the century, and the same band of skeptics understands a bit of economics- as things become scarce, the price goes up, way up.
The article is a confusing mish-mash that does not even mention climate change as a factor. In one paragraph it quotes "experts" saying "“We’re in a bubble right now, Prices are rising because everyone expects them to do so. We’ve seen the same thing in the real estate market.” and then concludes with “The situation is dire. We need to do relative sacrifices. But people don’t realize how dire the situation is.”
Far less confusing are the terrific graphics, including one on burning through oil and another on conserving oil. In this particular instance, two pictures are worth far more than a thousand words. ::New York Times
If Americans cut back on their driving, walked, biked, and took public transportation to and from work, not only would we save oil, cut freeway congestion, we'd also see a decline in obesity. Even people who take the bus or the train still have to walk from the stop to their place of employment.
One thing that so many economists miss: just because we have the reserves in the ground doesn't mean we can keep producing them at current rates.
This gets to the core of what peak oil is really about: production rates and not about reserves. Conventional reserves stand at about 1 trillion barrels which is enough for 32 years at 85mbpd. Production, however, is dependent on reservoir pressure (among other things). Pressure begins declining as soon as you start producing oil. So when we are extracting that last 5bbl of oil 30 years from now it won't come flowing out at 85mbpd.
Ghawar started out around 3200psi and 300bbl. Once it hits 150bbl, it can be inferred that it will only be at 1600psi, which means that flow would decline from 6mbpd to 3mbpd.
That's not an entirely accurate assessment of the picture. After all there are other factors that affect production rates such as number of wells, aquifer drive, porosity, etc. The fact remains that fundamental geology is working against production rates.
@greenPlease
You are absolutely right. Most articles in mainstream media talk about oil reserves and state there is enough for decades. But it's not about the size of the tank (oil in the ground), its about the tap (oil production rate).
Nozzie